Kurdish forces at a checkpoint near Mosul. Photograph: Romina Peñate/Demotix/Corbis

What is Isis?

Led by an Iraqi, Abu Bakr al-Baghdadi, Isis (the Islamic State in Iraq and the Levant – al-Sham in Arabic) is a militant group so hardline that it was disavowed by al-Qaida's leader, Ayman al-Zawahiri. The group's reputation for brutality was reinforced when it released photos and videos over the weekend showing some of the prisoners it had captured being killed apparently in the desert near Tikrit. Claims that 1,700 prisoners were killed could not be verified.

Isis has already shown its ruthlessness in the areas of Syria under its control, namely eastern Aleppo and the city of Raqqa. It was blamed for the February killing of a founding member of the Salafi group Ahrar al-Sham and the group's leader in Aleppo, Muhammad Bahaiah, who had close connections to senior al-Qaida leaders. It was also blamed for the assassination of Jabhat al-Nusra's leader in the Idlib governorate, Abu Muahmmad al-Ansari, along with his wife, children and relatives. It ordered the crucifixion of a man accused of murder. Other forms of punishment include beheadings and amputations.

How did the group start?

Isis has its roots in the al-Qaida group in Iraq, the Islamic State of Iraq (ISI). ISI's involvement in the Syrian conflict was indirect at first. Abu Muhammad al-Joulani, an ISI member, established Jabhat al-Nusra in mid-2011, which became the main jihadi group in the Syrian war. Joulani received support and funding from ISI and Baghdadi.

Baghdadi sought to gain influence over the increasingly powerful Jabhat al-Nusra by directly expanding ISI's operations into Syria, forming Isis in April last year, but differences over ideology and strategy soon led to bitter infighting. Isis turned out to be too extreme not just for Jabhat al-Nusra but for al-Qaida itself, leading to a public repudiation by Zawahiri, who last month called on Isis to leave Syria and return to Iraq.

How has it grown so powerful?

Isis has secured huge cashflows from oilfields in eastern Syria, which it commandeered in late 2012. It also reaped windfalls from the smuggling of raw materials plundered from the crumbling state and priceless antiquities from archeological digs. Computer sticks captured just before the fall of the northern Iraqi city of Mosul have shown the full extent of the group's finances. Before Mosul, total cash and assets of Isis came to $875m (£515m). After Mosul, the group's financial assets are estimated to be about $2bn, with money taken from banks and military supplies captured. Isis now controls territory that stretches from the eastern edge of Aleppo, in Syria, to Falluja, Mosul and now Tal Afar in Iraq.

Who will stop Isis?

The US is reported to be preparing to open a direct dialogue with Iran about how to deal with Isis. The Wall Street Journal reported on Sunday that Washington was set to open talks with Tehran on ways to push back the militants. Whether this will extend to military coordination – US air strikes, or drone intelligence in support of Iranian Revolutionary Guards or Iraqi units – is up in the air.

Isis also poses a threat to the Kurdish regional government, as it and radical Sunnis may be even more difficult for Kurds to deal with than the Shia-led government of Nouri al-Maliki. In any case, stopping Isis will fall mainly on Maliki's shoulders. The Iraqi prime minister has vowed to retake every inch seized by the militants.

What do we know about its members?

The information from the computer sticks shows the group's leaders to have been carefully chosen. Many of those who reported to the top tier are battle-hardened veterans of the insurgency against the US a decade ago. Isis has bolstered its numbers by recruiting thousands of foreign volunteers in Syria, some from Europe and the US, and is estimated to have more than 10,000 men under its control. The computer sticks included names and noms de guerre of all foreign fighters, senior leaders and their code words, and initials of sources inside ministries.

What are its aims?

Baghdadi believes that the world's Muslims should live under one Islamic state ruled by sharia law, the first step towards which is establishing a caliphate spanning Syria and Iraq. Charles Lister, a visiting fellow at the Brookings Institution, Doha, wrote in a paper last month: "Isis now presents itself as an ideologically superior alternative to al-Qaida within the jihadi community and it has publicly challenged the legitimacy of al-Qaida leader Ayman al-Zawahiri. As such it has increasingly become a transnational movement with immediate objectives far beyond Iraq and Syria."